Supreme Court sides with Rogers over il­le­gal down­loads

The Globe and Mail (Prairie Edition) - - REPORT ON BUSINESS - FROM B1

The Supreme Court of Canada says copy­right own­ers must pay the costs in­ter­net providers in­cur to iden­tify cus­tomers sus­pected of il­le­gally ac­cess­ing movies and other con­tent on­line, a rul­ing that adds a hur­dle for rights hold­ers hop­ing­to­takele­galac­tion­a­gainst thou­sands of in­di­vid­u­als at once.

Canada’s top court ruled on Fri­day that Rogers Com­mu­ni­ca­tions Inc. is en­ti­tled to its rea­son­able costs for the steps it takes to iden­tify cus­tomers as­so­ci­ated with in­ter­net pro­to­col ad­dresses al­leged to be as­so­ci­ated with il­le­gal down­load­ing or up­load­ing of files pro­tected by copy­right. Rogers and other in­ter­net ser­vice providers (ISPs) will still have to in­cur costs as­so­ci­ated with the “no­tice-and-no­tice” sys­tem, which al­lows rights hold­ers to con­tact the providers about al­leged copy­right in­fringe­ment and re­quires the ISP to pass that no­tice on to the cus­tomer, which they do by email.

Rogers es­ti­mates that across Canada, ISPs re­ceive more than 14 mil­lion of th­ese re­quests a year. The no­tices typ­i­cally urge users to stop shar­ing or ac­cess­ing copy­righted ma­te­rial, but they some­times in­clude de­mands for vol­un­tary pay­ment of a set­tle­ment (the limit on dam­ages for per­sonal li­a­bil­ity in such cases is $5,000). It is dif­fi­cult to know how many peo­ple re­spond to such de­mands.

Fri­day’s rul­ing means that if the copy­right hold­ers want to go a step fur­ther and seek a court or­der to iden­tify spe­cific users and then sue them for copy­right in­fringe­ment, it is the rights hold­ers them­selves who must cover the cost to the ISPs of iden­ti­fy­ing those peo­ple.

The ap­pli­cant in the case was Volt­age Pic­tures, LLC, the Los Angeles-based pro­duc­tion com­pany be­hind films in­clud­ing The Hurt Locker and Dal­las Buy­ers Club. It tried to sue one per­son in this in­stance but said it planned to even­tu­ally bring a “re­verse class ac­tion” against 55,000 peo­ple it says used file-shar­ing ser­vices to ac­cess its movies.

Rogers said it alone re­ceives more than two mil­lion re­quests a year to send its cus­tomers no­tices from rights hold­ers al­leg­ing some sort of in­fringe­ment. It has an au­to­mated sys­tem in place to han­dle that vol­ume of re­quests.

But it re­ceives far fewer or­ders com­pelling it to ac­tu­ally hand over the names and ad­dresses of peo­ple who re­ceived those no­tices. Since such iden­ti­fi­ca­tion typ­i­cally leads to le­gal ac­tion, misiden­ti­fy­ing a user can have se­ri­ous reper­cus­sions, and Rogers says its em­ploy­ees use a mul­ti­plestep, man­ual process to en­sure ac­cu­racy.

The Supreme Court ruled that Rogers is en­ti­tled to its rea­son­able costs of that process, but said it was not a given that the com­pany can re­coup the $100 an hour it claimed. The court or­dered the Fed­eral Court mo­tion judge who

first dealt with the mat­ter to de­ter­mine what rea­son­able amount Rogers is ac­tu­ally en­ti­tled to.

“This is an im­por­tant win for our cus­tomers and mil­lions of in­ter­net sub­scribers fac­ing open season on their per­sonal in­for­ma­tion,” David Watt, se­nior vi­cepres­i­dent of reg­u­la­tory af­fairs at Rogers, said in a state­ment.

Ken Clark, who rep­re­sented Volt­age in the case, said his client

had no com­ment on the case or whether it would con­tinue to pur­sue the re­verse class ac­tion against 55,000 in­di­vid­u­als. In court fil­ings, the com­pany ar­gued that pay­ing the full amount quoted by Rogers to iden­tify each per­son would cost $8-mil­lion, which Volt­age said was likely an “in­sur­mount­able bar­rier.”

The Fed­eral Court of Ap­peal pre­vi­ously ruled that Rogers

must in­cur the en­tire cost of iden­ti­fy­ing users and Bram Abram­son, a lawyer who rep­re­sented the Cana­dian In­ter­net Pol­icy and Pub­lic In­ter­est Clinic, which in­ter­vened in the case, said the Supreme Court de­ci­sion “re­stores bal­ance” to the sys­tem.

He said the rul­ing was also im­por­tant be­cause the court ex­pressed a com­mit­ment to pri­vacy rights. How­ever, Mr. Abram­son noted that much un­cer­tainty re­mains in the no­tice-and-no­tice regime and that one-off court cases will con­tinue to crop up in the absence of a broader so­lu­tion. The regime came into force in 2015 and the fed­eral gov­ern­ment has the right to pass reg­u­la­tions − such as whether ISPs can charge a fee for send­ing the no­tices or what the no­tices can say − but has not done so.

“Cre­ators ob­vi­ously have a right to make money from their work, but it’s a ques­tion of what’s ef­fec­tive and what makes sense. You know, we should all wear seat belts but we don’t sta­tion po­lice of­fi­cers in cars to make sure we do it at all times,” Mr. Abram­son said.

Graham Honsa, an in­tel­lec­tual prop­erty lawyer with Wil­son Lue LLP in Toronto, said it is too soon to tell whether this is truly a win for Rogers and other ISPs be­cause the mo­tions judge could de­ter­mine that a vast ma­jor­ity of their claimed ex­penses are not “rea­son­able” for copy­right hold­ers to cover.

How­ever, he said, “I think it does make it harder to sue 55,000 peo­ple,” not­ing that even if the judge al­lows only a nom­i­nal amount such as $1 per sub­scriber, it would cost at least $55,000 for a party like Volt­age to be­gin a class ac­tion.


Supreme Court of Canada jus­tices are seen in Ottawa in March. As part of its rul­ing on Fri­day, the Supreme Court or­dered a judge to de­ter­mine what mon­e­tary amount Rogers is en­ti­tled to claim on the process of iden­ti­fy­ing and no­ti­fy­ing cus­tomers who have re­ceived in­fringe­ment no­tices.

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